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News 1
Arcadia Group and their CVA's

David Mallinson, Head of Dispute Resolution comments on Sir Philip Green's Arcadia Group and their CVA's.

The beleaguered British High Street has seen a growing number of increasingly high profile attempts by tenants to renegotiate terms with their landlords.

The latest is Sir Philip Green’s Arcadia Group. The context is a Company Voluntary Arrangement (CVA) which is a preferred alternative for the retailer to a formal administration or indeed liquidation procedure. In the case of Arcadia landlords are faced with seven linked CVA’s which are all required if the retail empire is to survive in any meaningful form. The issue for landlords is how far and how hard to push their resistance to any significant change in the terms of their lease (s), typically in the form of rent payments, when the potential alternative is empty retail units and a large question mark over the prospect of finding replacement tenants of a similar ‘calibre’.

A number of these arrangements have been adopted in the past 18 months but there appears now to be a growing resistance and a determination to negotiate improved terms from the initial CVA proposal. There is no doubt that the traditional high street is undergoing huge challenges at the present time and even a negotiated CVA is no ‘guarantee’ of future success, as retail consumers increasingly adopt alternative online shopping ‘habits’. The landscape is a very different one now to what it was just 5 years ago and we simply do not know where and how far these changes will affect the high street going forward. At the moment there appears to be a desire to ‘hold’ out in the hope that this will lead to some improvement in the proposed terms but unless other economic and related factors change this may be only a short term solution to some far more challenging and potentially complex issues for landlords.’

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Our Experts

David Mallinson

Head of Department
Dispute Resolution

Nicola Webster

Senior Associate Solicitor
Dispute Resolution

Lee Quickenden

Associate (FCILEx)
Dispute Resolution

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